Percentage change in Price of the bond = -1 * Modified Duration * yield change
= -1*6.5*-0.001 = 0.65%
2. Tropical Dreams bonds have a duration of 6.8 years and a modified duration of 6.50....
Tropical Dreams bonds have a duration of 6.8 years and a modified duration of 6.50. If the yield is expected to decrease by 0.1%, what is the expected percentage change in the price of the bonds issued by Tropical Dreams? The yield to maturity is 9% and the bonds mature in ten years. The bonds carry a 9% coupon, paid semiannually. The par value is $1,000.
Ten years ago, Simply Splendid Corp. issued 40 year bonds with a $1,000 face value and a 7 percent coupon rate, paid semiannually. Bond of this risk currently have a yield to maturity of 9 percent. How much would you expect to pay for one of these bonds today? Harley Group has outstanding $1,000 face value bonds that have a 6.5 percent coupon rate, paid semiannually, and mature in 18 years. They are currently selling for $935.15. What is their...
2. Thatcher Corporation’s bonds will mature in 20 years. The bonds have a face value of $1,000 and an 9% coupon rate, paid semiannually. The price of the bonds is $1,350. The bonds are callable in 5 years at a call price of $1,250. What is their yield to maturity? What is their yield to call?
Steel Pier Company has issued bonds that pay semiannually with the following character: Coupon: 10% Yield to Maturity: 10% Maturity: 10 years Macaulay Duration: 6.76 years If the yield to maturity decreases to 8.045%, the expected percentage change in the price of the bond using modified duration would be ________. A) 12% B) 11% C) 10% D) 13% Answer: 12% Please explain
Thatcher Corporation's bonds will mature in 11 years. The bonds have a face value of $1,000 and an 9% coupon rate, paid semiannually. The price of the bonds is $1,050. The bonds are callable in 5 years at a call price of $1,050. Round your answers to two decimal places. What is their yield to maturity? % What is their yield to call? %
a. A 6% coupon bond paying interest annually has a modified duration of 7 years, sells for $820, and is priced at a yield to maturity of 9%. If the YTM decreases to 8%, what is the predicted change in price ($) using the duration concept? (2 marks) b. A bond with annual coupon payments has a coupon rate of 6%, yield to maturity of 7 % , and Macaulay duration of 12 years. What is the bond's modified duration?...
Question 24 (1 point) A company's bonds have a face value of $1,000. The bonds carry a 7% coupon, pay interest semiannually, and mature in 9 years. What is the current value of these bonds if the yield to maturity is 7.26%?
2. Country Sun Foods' bonds have 7 years remaining to maturity. The bonds have a face value of $1,000 and a yield to maturity of 8 percent. They pay interest annually and have a 9% coupon rate. What is their current yield? 8.20012 ATTON a. 8.55% b. 8.95% of the 92118121 eSPI12 c. 9.41% d. 9.95% e. $1,052.06 e (9wans uoy oloi Tecunltd Corporation has issued bonds that have a 9 percent coupon rate, payable semiannually. The bonds mature in...
THE TIME TO MATURITY OF THE BONDS
IS 5 YEARS
5. Duration as an Approximation (Empirical) This question has two purposes. The first is to get you back in front of a computer and either coding the solution using a programming language or utilizing a spreadsheet to do the calcu- lations. Either is acceptable and a valid method of engaging with the question. The second is to have you more thoroughly explore the concept of duration. I will give you...
4. S.S. Corporation’s bonds will mature in 15 years. The bonds have a face value of $1,000 and an 6.5 percent coupon rate, paid semiannually. The price of the bonds is $1,050. What is the yield to maturity?